SBI ties up with Maybank in Singapore, Malaysia

KATHMANDU: In a major bid to be the funnelling agency for remittances sent home by account holders working abroad, the State Bank of India (SBI) is tying up with Maybank (Malaysian Bank Berhad) in Singapore and Malaysia.

Since unlike in the Gulf countries - where exchange companies are appointed as agencies for facilitating remittances - remittances are made via banks through electronic transfer, SBI will post officials at select Maybank branches in Singapore and Malaysia to collect remittances.

It plans to start similar operations in South Korea as well and is looking for a local bank it can team up with.

In Japan and Germany, where SBI has its own offices, it has also entered into a similar deal with American Express Bank.

With an eye especially on Nepalese expatriates working in the Gulf, SBI has increased partnerships with exchange companies in the oil-rich region. At present, it has tied up with exchange companies in Saudi Arabia, Qatar, Kuwait, Bahrain and the UAE.

The Middle East partnerships are expected to boost the SBI joint venture in Nepal, The Nepal SBI Bank, in which the parent bank holds 50 percent stakes, public 30 percent and two Nepalese institutions hold the remaining 20 percent.

Keeping in view that Nepal imports nearly 60 percent of its necessities from India and exports nearly 45 percent of its products to its southern neighbour, SBI is also starting a new "cash management product" that will substantially reduce the time taken for remittances from India to Nepal.

At present, if a buyer based in India orders a product from Nepal, he generally pays by cheque, which is couriered to the selling company in Nepal.

When the seller deposits the cheque in his account, it goes back to India once again for clearance, with at least eight days being needed for the entire exercise.

According to SBI's new scheme, all the seller will now need is a letter asking the bank to make the payment whereupon the money will be electronically transferred into his account.

To make the scheme effective, SBI is increasing its clearance centres in India from the present 326 to 600.

It will appoint a second bank as its correspondent in this scheme as well. Though StanChart and Amex are vying for the deal, it is likely to go to the latter in view of the already existing partnerships with Amex.